One of the biggest decisions a business can make is deciding how it will make its decisions.
Best-selling author Michael Lewis made this insightful observation about the flawed human psyche in one of his recent novels, The Undoing Project: “Man is a deterministic device thrown into a probabilistic universe. In this match, surprises are expected.”
As humans, there are many biases that contribute to the way we make decisions: overconfidence, confirmation bias, risk aversion, etc. These flaws can prevent us from making solid, strategic-level decisions to efficiently manage daily challenges such as balancing customer service and cost. Weaknesses in the human thought process come into play when it comes to the sheer volume and complexity of dispatch planning and fleet management.
Optimization is a hot topic that is impacting many industries and geographies, and for good reason. Optimization engines are a very efficient and consistent methodology for improving decision making and achieving cost and quality differentiation for your product. Many industries have realized the importance of utilizing optimization engines in their logistics departments. A lot of people have also come to realize that optimization is not something your organization just adapts to like flipping on a light switch; you don’t just install the software and *BOOM* your process is optimized. You must have a highly-experienced and capable team willing to adjust to change, create a well-defined and adaptable process, and become fluent with an advanced and innovative tool set.
An optimization engine does the math that humans are incapable of doing, using planning algorithms to create an optimal solution for each day’s deliveries. It also adjusts in real-time, allowing users to consider many alternatives, providing better, more optimized solutions than a manually-produced solution. Who wouldn’t want to use a tool that makes you more successful? This sounds like a no-brainer. Curiously enough, getting team members onboard with this new software can be a challenge.
For example, if you were given a self-driving car, would you immediately trust that the car knows how to drive you around better than you do? This metaphorically depicts the aversion team members have when it comes to accepting the suggestions the optimization software presents to them. Just like you would probably have trouble turning everything over to a self-driving car, it is difficult for a dispatch and logistics specialist to trust that this software can make decisions more efficiently than they can.
To overcome these trust issues, everyone on the team needs to be on board with the mission and understand how data impacts that mission. Data isn’t just about numbers – it’s about people, and people have hesitations and mindsets that can make it difficult to deal with change. To ensure success, an organization must commit to helping team members adapt to the “optimization lifestyle.” It takes time, but even some of the biggest initial skeptics can turn into advocates when they are provided with the tools and support they need to implement optimization.
Noted inventor and author Arthur C. Clarke once said, “It is vital to remember that information — in the sense of raw data — is not knowledge, that knowledge is not wisdom, and that wisdom is not foresight.” New technology offers a plethora of information – more than the human brain can begin to contain. Nonetheless, it is important to remember that an optimization engine is not designed to replace the work that a human does. The engine and the human are meant to have a symbiotic relationship; the engine suggests decisions based on algorithms, while the human applies logic to these suggestions.
The engine empowers you to perform proactive delivery planning as well as real-time re-planning. Humans are a “deterministic device,” and the optimization engine provides support in our decision-making process when our “probabilistic universe” throws us a curveball. A receptive team that can recognize the opportunities an optimization engine can offer, mixed with well-defined processes and procedures, can have your operation running at minimal costs and maximized efficiency in any given situation.
Dave Donaldson leads Command Alkon’s Optimization team, which is actively invested in preparing the ready mixed concrete industry for the next generation of logistics management. During his almost 20 years in the construction materials industry with Command Alkon, Dave has served in several capacities, but his passion remains with helping customers achieve greater success through introducing new approaches, innovations and thought processes. Dave graduated in 1991 from Auburn University with a degree in Industrial Design.